[RPG] Mage population density in Mage: The Awakening

The supernatural creatures are essentially following physical laws that normal people aren't aware of, or manipulating loopholes in those physical laws that normal people aren't aware of; there are a set of laws governing the universe that vampires/faeries/etc aren't breaking, they're simply manipulating them in unusual (as far as normal people are concerned) ways.

Mages are actually breaking the laws governing how the universe works, which is why their actions can create impossible situations or paradoxes when supernatural creatures can't.

Given the complicated nature of the question(s), I'm going to break it up and answer it in pieces, not necessarily in the same order as it was presented.

Do you continue to use penalties for extended sympathetic casting, identically to instant sympathetic casting?

Yes. Sympathy isn't a spell factor like Area and Duration. Spell factors are optional ways for the caster to customize the effects of the spell, while sympathy is a penalty that makes it more difficult to make the magic happen due to a lack of connection with the target. It's a barrier to making the magic happen at all, as opposed to a nice extra that increases the difficulty.

This is doubly true when you remember the rule for extended actions in the Core Rulebook that states that the number of attempts on extended actions you can take is limited by your dice pool.

The World of Darkness states the limitation as equal to the character's Attribute + Skill total (p. 128).

...does this mean that sympathetic "attacks" would almost certainly require disciple and lower level mages to resort to cabal level group rituals...

Note that actual attack spells (ones that directly affect the Pattern of the target) require an additional Arcanum dot. So you can do bashing damage at Adept level, or lethal at Master level. Indirect attacks don't have this problem, which gives PCs an incentive to be creative. Indirect attacks also don't rely on Potency to determine how much damage they do (using Matter to drop a wall on someone through a scrying window is going to be treated the same way that any wall falling over would be), so if you can score a success or three, you're golden.

Sympathetic attack spells are generally bad ideas for other reasons, such as how they allow the target to counter-attack (even without possessing Space) and are always vulgar, no matter what. The lower average Potency is also going to make your attack very vulnerable to being counterspelled.

what effects does it have on extended attack magic (Which is specifically mentioned in Tome of the Mysteries as often being Sympathetic, despite what seems like possibly tremendous penalties after all the bonuses and penalties are combined).

Extended attack magic (almost always) has to be sympathetic, because no target is going to sit still for nine hours while you summon their death. The effect that the sympathy and ritual casting time rules have is to heavily discourage extended, sympathetic attacks. You aren't supposed to be able to instakill anybody you want from the privacy of your sanctum. At least, not unless you're a Master with high Gnosis.